WGU D101 Unit Test Q&A Bank 2026 | Latest Update | Exam
Success Guide | Graded A+
1. What does the term 'relevant range' refer to in cost accounting?
The range of activity within which fixed and variable cost behavior is
consistent.
The point at which total costs equal total revenues.
The range of costs associated with direct materials only.
The maximum production capacity of a manufacturing facility.
2. Warner Manufacturing reported sales of $2,000,000 last year (100,000 units
at $20 each) when the break-even point was 80,000 units. Warner's margin of
safety ratio is
80%
20%
25%
120%
3. What account is debited when recording the allocation of manufacturing
overhead to production?
Work-in-process inventory
Manufacturing overhead
Cost of goods sold
Finished goods inventory
,4. In a scenario where a manufacturing company is implementing a new
process costing system, what should be the first step regarding costs?
Identify and allocate direct materials to the production process.
Calculate the total manufacturing overhead costs.
Analyze the variance in labor costs.
Determine the selling price of the finished goods.
5. What is the formula to calculate the cost of ending work-in-process
inventory?
Cost of ending work-in-process inventory = Direct materials cost +
Conversion costs
Cost of ending work-in-process inventory = Direct materials cost /
Conversion costs
Cost of ending work-in-process inventory = Direct materials cost -
Conversion costs
Cost of ending work-in-process inventory = (Direct materials cost +
Conversion costs) * Percentage of completion
6. Describe how stepped fixed costs can impact a manufacturing company's
budgeting process.
Stepped fixed costs do not affect budgeting as they are always
variable.
Stepped fixed costs simplify the forecasting of expenses.
Stepped fixed costs allow for easier budgeting since they remain
constant.
Stepped fixed costs can lead to unpredictable budgeting as costs
may increase significantly after certain production thresholds are
, met.
7. In which setting is the use of an ABC overhead allocation system
appropriate?
Operations involve a variety of different products and processes.
All projects and processes in the manufacturing process are the same.
Products are different, but the processes are roughly the same.
All products being manufactured are the same.
8. If the standard cost for materials is $2 per lb and the actual cost incurred for
the 5,000 lbs used is $1.80 per lb, what would be the total materials cost
variance?
$500 favorable
$1,000 unfavorable
$500 unfavorable
$1,000 favorable
9. Describe the role of facility support overhead costs in the context of activity-
based costing.
Facility support overhead costs are fixed costs that remain constant
regardless of production levels.
Facility support overhead costs are direct costs that can be traced to
specific products.
Facility support overhead costs are variable costs that change with the
number of units produced.
Facility support overhead costs are indirect costs that are allocated
to products based on the activities that drive those costs.
, 10. What is the formula used to calculate equivalent units in a manufacturing
context?
Equivalent Units = Total Costs / Total Units
Equivalent Units = Beginning Inventory + Completed Units - Ending
Inventory
Equivalent Units = Completed Units + (Ending Inventory Units ×
Percentage Completion)
Equivalent Units = Total Units Started - Total Units Completed
11. The cost of units finished in the last (final) department will flow from Work in
Process to:
Accounts Receivable
Finished Goods
Cost of Goods Sold
Raw Materials
12. What volume of sales dollars is required to earn a target income of $240,000
if total fixed costs are $300,000 and the contribution margin ratio is 40%?
$600,000
$900,000
$990,000
$1,350,000
13. Which statement is correct with respect to activity-based costing (ABC)
overhead allocation?
Success Guide | Graded A+
1. What does the term 'relevant range' refer to in cost accounting?
The range of activity within which fixed and variable cost behavior is
consistent.
The point at which total costs equal total revenues.
The range of costs associated with direct materials only.
The maximum production capacity of a manufacturing facility.
2. Warner Manufacturing reported sales of $2,000,000 last year (100,000 units
at $20 each) when the break-even point was 80,000 units. Warner's margin of
safety ratio is
80%
20%
25%
120%
3. What account is debited when recording the allocation of manufacturing
overhead to production?
Work-in-process inventory
Manufacturing overhead
Cost of goods sold
Finished goods inventory
,4. In a scenario where a manufacturing company is implementing a new
process costing system, what should be the first step regarding costs?
Identify and allocate direct materials to the production process.
Calculate the total manufacturing overhead costs.
Analyze the variance in labor costs.
Determine the selling price of the finished goods.
5. What is the formula to calculate the cost of ending work-in-process
inventory?
Cost of ending work-in-process inventory = Direct materials cost +
Conversion costs
Cost of ending work-in-process inventory = Direct materials cost /
Conversion costs
Cost of ending work-in-process inventory = Direct materials cost -
Conversion costs
Cost of ending work-in-process inventory = (Direct materials cost +
Conversion costs) * Percentage of completion
6. Describe how stepped fixed costs can impact a manufacturing company's
budgeting process.
Stepped fixed costs do not affect budgeting as they are always
variable.
Stepped fixed costs simplify the forecasting of expenses.
Stepped fixed costs allow for easier budgeting since they remain
constant.
Stepped fixed costs can lead to unpredictable budgeting as costs
may increase significantly after certain production thresholds are
, met.
7. In which setting is the use of an ABC overhead allocation system
appropriate?
Operations involve a variety of different products and processes.
All projects and processes in the manufacturing process are the same.
Products are different, but the processes are roughly the same.
All products being manufactured are the same.
8. If the standard cost for materials is $2 per lb and the actual cost incurred for
the 5,000 lbs used is $1.80 per lb, what would be the total materials cost
variance?
$500 favorable
$1,000 unfavorable
$500 unfavorable
$1,000 favorable
9. Describe the role of facility support overhead costs in the context of activity-
based costing.
Facility support overhead costs are fixed costs that remain constant
regardless of production levels.
Facility support overhead costs are direct costs that can be traced to
specific products.
Facility support overhead costs are variable costs that change with the
number of units produced.
Facility support overhead costs are indirect costs that are allocated
to products based on the activities that drive those costs.
, 10. What is the formula used to calculate equivalent units in a manufacturing
context?
Equivalent Units = Total Costs / Total Units
Equivalent Units = Beginning Inventory + Completed Units - Ending
Inventory
Equivalent Units = Completed Units + (Ending Inventory Units ×
Percentage Completion)
Equivalent Units = Total Units Started - Total Units Completed
11. The cost of units finished in the last (final) department will flow from Work in
Process to:
Accounts Receivable
Finished Goods
Cost of Goods Sold
Raw Materials
12. What volume of sales dollars is required to earn a target income of $240,000
if total fixed costs are $300,000 and the contribution margin ratio is 40%?
$600,000
$900,000
$990,000
$1,350,000
13. Which statement is correct with respect to activity-based costing (ABC)
overhead allocation?
